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German Budget Deficit in 2006 at 1.7% of GDP

Germany's budget deficit in 2006 fell even lower than predicted to 1.7% of gross domestic product, a government agency said Thursday.

Germany's Finance Ministry had announced new debt for the year would be 1.9% of GDP, but according to figures released by the Federal Statistics Office, it came in at about 39.5 billion euros ($51.92 billion), about 7 billion euros ($9.2 billion) lower than the ministry's estimate.

It is the first time since 2001 that Germany's deficit has come in below the 3% maximum set by the European Union for the 13 nations using the euro currency. Germany's 2005 deficit came in at 3.2%.

The improved state of public finances follows a forecast rise in tax revenue, due in large part to the 3 percentage point increase in value added tax to 19% on Jan. 1, and economic growth of 2.5% in 2006, the fastest rate in six years.